This is a day for the history books as WTI (West Texas Intermediate) entered negative territory for the 1st time ever! Settling around -$38.00/bbl, the negative price sent shock-waves around the world. Now, it must be stressed that this is for the May futures contracts that will be expiring tomorrow. But nevertheless, for prices to go negative, is a major historic event. From the demand side – there basically is none. From the supply side – the globe is awash in both oil and gas, and storage facilities are nearing max capacity. Great attention will be paid to the June futures contracts for WTI and make no mistake about it – these contracts could hit negative prices as well. If they do, then there is unquestionably something structural underneath the oil markets that is broken. Also, understand that free-markets is about price discovery and this may simply be an attempt by markets to clear. However, we think that this is something much more structural. This could be hedge fund(s) failing, energy corps failing, etc… or some combination, amongst other issues.
The geopolitics of the matter can also not be forgotten or downplayed. OPEC + just agreed to cut nearly 10 million b/d from production and despite this – prices continued their descent – which we argued would happen. This calls into question the petro-dollar system and we discuss this during our podcast. We also note the continued stress this places on energy firms that were already struggling to begin with, due to the supply and demand dynamics of the markets, in conjunction with their massive debt loads. This is far from over. Also, note that many countries protesting prior to COVID19 are heavily dependent on oil for their government revenues. This downward trend will only exacerbate any and all issues that already existed in these countries. Be prepared for more global protests – these are not transitory – they are history in the making.
Lastly, we discuss some brief articles centered around the health and life or death situation of North Korean leader, Kim Jong Un. As well as President Trump’s recent decision and Executive Order to temporarily suspend immigration. We also mention Iranian criticisms of the USA with respect to the economic sanctions that continue to cripple the country, especially in light of COVID19, from which Iran is suffering severely. And then announced earlier, there was the formation of an “emergency” government in Israel as the two sides have been unable to successfully form a government despite multiple attempts. Something tells us all of these stories are connected, but time will tell all. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Oil #Recession #Protests #War #Peace #USA #Iran #Russia #Venezuela #China #SaudiArabia #Debt #Gold #Depression
Perhaps it’s the final chapter (singular) as opposed to plural or even worse, perhaps it’s already over? And sad to say, there are many out there who study the social and moral decay of this country who could articulately and eloquently argue that the United States of America has already ended for all intents and purposes. In today’s discussion we highlight the continued expansion of the Federal Reserves balance sheet, which now stands at over $6.3 trillion and growing rapidly – mainly for the benefit of Wall Street and Corporate America. And of course with very little to no oversight. We also discuss the $25 billion airline bailout and some of the terms of this agreement between the government and the airline industry. Of course the airlines weren’t too thrilled with some of the conditions – further showing their shamelessness and making it appear as if these bailouts are simply a part of the process and that they’re well deserving.
Other mentions pertained to Boeing opening up production next week. This is despite the fact that airlines remain grounded and Boeing losing some 300 orders for new jets. Raises the question, what then are they producing? Perhaps war planes, drones, or other aircraft for defense/war purposes? We hope not, but remember, when all else fails, they take us to war. And lastly, we note some of this increased language about the lack of transparency from China with respect to COVID19. This is likely to continue and may very well start some sort of conflict and/or war – whether that’s bio, cyber, economic, or kinetic. It’s also quite possible that there may be a proxy-war that could likely erupt in Iran and/or Venezuela, as we have been noting here for months. It’s not a pretty picture and conditions are likely to get much worse before they get better. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #Bailouts #EndTheFed #Debt #USA #Depression #Oil #Gold #COVID19
As we enter corporate earning’s season, we’re already beginning to see the effects of an ailing economy coupled with COVID19. Many of the banks are reporting numbers that are through the floor – this is no surprise. They are also readying themselves for a wave of defaults across the spectrum of financial products. Whether that’s mortgages, autos, credit cards, you name it. Another interesting data point to note is that nearly 17% of S&P 1500 companies can now be classified as a “zombie” company. This means that their interest expenses exceed their cash flows. Now perhaps you understand the title of today’s podcast? This is especially true against the backdrop of one of the largest rallies in market history over the last few weeks. So strong, you have many in the media and Wall Street, already declaring that the bear market is over and that everything is fine and off to to the races we go. This is pure lunacy. But this is also a reflection of the market mentality and of the times. So many have been conditioned over the last decade that easy money, printed at will, can solve any problem. Well, we believe that Junior is about to find out the hard way that money printing is not a panacea. As such, we expect the markets to sell off significantly over the coming years that will be reminiscent of the NASDAQ in 1999-2001 and the DOW in 1929 through the early 1930’s. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #Bailouts #Debt #USA #Oil #Gold #Liberty
A visual follow-up to our recent podcast entitled, The Oil Conundrum. We want to take a moment to review the price action of oil (WTI) and natural gas and to discuss what it means for the global economy at-large and for the energy sector more specifically. We also discuss the recent decision rendered by OPEC to cut nearly 10 million bpd from production. As well as to note the likely geopolitical fallout from a global economy that is and has been slowing down for quite awhile. #Oil #OPEC #Economy
Sometimes it’s nice to take a step back from all the action and take a deep breath. That’s what we do in today’s podcast, as we simply list a handful of geopolitical risks that remain outstanding. They consist of: Brexit, US/China trade war, the Syria/Turkey conflict, the potential alliance between Turkey and Russia, unresolved issues relating to Iran and Venezuela, global central banks that are out of control, protests in Hong Kong, Spain, Haiti, Egypt, Ecuador, and others, also domestic policy concerns in Congress. These stories will continue to drive the news for the remainder of the year and some, well into next year and possibly beyond. Stay diversified, stay vigilant, and stay with The Kapital News. #Politics #Justice #Peace #Truth #Economy #Recession
Following the worst trading day of 2019 (so far), we witnessed some further selling in the Asian and European markets. However, the major US stock indices all rallied around 1%. A lot of the rally was near the end of the day’s trading session as James Bullard, President of the St. Louis Fed, stated that more rate cuts may be appropriate. In addition, Goldman Sachs, noted that they do not foresee a trade deal between the US and China taking place prior to the 2020 election (bad news is good news). In addition, they are also now projecting that the Fed will cut interest rates two more times in 2019. This is a dangerous game of expectations and anticipation of future rate cuts. We just had the Federal Reserve lower rates by 25 basis points and end quantitative tightening, and global markets just suffered their worst trading day of 2019. Clearly, the monetary addicts on Wall Street are looking for another “hit” from the Fed to keep the stock market up. If rate cuts and QE are the only thing(s) sustaining any semblance of economic growth and/or keeping the stock markets afloat – all we can say is look out below, in due time. In other news, we have National Security Advisor, John Bolton, in South America, following the signing of an Executive Order, applying “maximum pressure” to the Maduro regime in Venezuela. Bolton is warning nations who side and have sided with Maduro that should they continue their support, they are advised that if and once the American “stooge,” Juan Guaido is installed, that any debt payments will be in question, since those loans were made to the Maduro government. Basically, Bolton is saying to Russia and China that once Guido is installed as “El Presidente” that you’re not getting paid. We also have Defense Secretary, Mark Esper on a recent trip to Australia that is catching the eyes and ears of the Chinese. Whereby the Chinese are issuing a warning to the US – do not install missiles in our backyard. And last but not least – India and Pakistan are in the midst of a continued dispute over the Kashmir territory. What if anything, could go wrong? Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Peace #PeaceNotWar #Economy #Politics
Ep. 104A - Global Market Sell-Off + Currency Manipulation
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So the trade war between the US and China has taken another step as China is willing to allow the Yuan to depreciate against a basket of currencies, and they are halting the import of US agricultural products. On the US side, following China’s response to further tariffs being placed on Chinese products, the Trump Administration has officially named China a currency manipulator. What this means is truly anyone’s guess as the open secret is that all countries are currency manipulators in one form or another. Nevertheless, this is a clear signal that the two parties are further apart. As such, this information sent global markets spiraling to the downside, with many global equity indices losing as much as 3%. Yields on government debt continue to make all-time lows in many nations and are nearing all-time lows in many others. This is a function of a flight to safety, as well as markets anticipating that central banks around the world will continue to cut interest rates. In other news, President Trump signed an executive order placing further pressure and restrictions on the Venezuelan regime, thus increasing those tensions. According to South Korea, at least two more missiles have been fired by North Korea. This is of course following the historic visit from President Trump when he stepped foot into North Korea in late June. Also, tensions are rising between the Indians and the Pakistanis regarding the Kashmir region. What we have is a lot of dry powder and a number of lunatics wandering around with boxes of matches. What could possibly go wrong? Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Economy #Recession
Ep. 60A - Trump Setting the Stage? + Barr's A No-Show
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Recalling the State of the Union Address from this year, President Trump informed us as to a few items that could derail the “economic miracle.” These items are playing out: endless wars, as the Venezuelan crisis heats up, political divisiveness, and further partisan investigations into Trump. In addition, we also have the Pres playing games with the Fed. The Pres will take all the credit for the “good,” but is setting the stage to lay the blame for all the “bad” on the Dems and the Fed. Meanwhile, AG Bill Barr was a no-show for his hearing before the House Judiciary Committee and now there are calls for his resignation and for him to be held in contempt.
A few stories worth discussing today pertained to the uprising in Venezuela, the Pres attacking the Fed, and perhaps an upcoming agreement on infrastructure spending. The story in Venezuela is one of geopolitical importance because it’s primarily concerned with oil and gas, but many questions remain and so the situation will remain fluid for some time to come. Meanwhile, the Fed is in the midst of its 2-day meeting to determine the next move for interest rates and right on time, the Pres was out tweeting that the Fed should cut interest rates and embark on another round of QE. If everything is “great,” then why implement emergency measures? Lastly, we discuss the pending infrastructure negotiations.
Are foreign entanglements a wise and prudent decision for the USA? Our Founding Fathers didn’t think so, but that doesn’t stop the powers that be and their quest for empire. It’s investigations for collusion and the Russians, if they meddle, but when we (USA), do it – there’s no problem?
